上调盈利预期，维持“增持”评级。公司品类及渠道积极扩张的同时，内部降本增效战略有序推进，利润率保持在优异水平，带动业绩表现高于于预期，考虑公司经营近况，我们上调公司盈利预期，预计公司2024-2026 年EPS 为1.15/1.35/1.54 元（2024-2025 年原值为1.04/1.22 元），参考行业可比公司，给予公司2025 年15.1X PE，对应目标价20.4 元，维持“增持”评级。Introduction to this report:
The expansion of categories and channels boosted the company's performance and recorded outstanding performance. We are optimistic that the future strategy will continue to strengthen, and raise the company's profit expectations.
Key points of investment:
Profit expectations were raised and the “increase in holdings” rating was maintained. While the company's categories and channels are actively expanding, internal cost reduction and efficiency strategies are progressing in an orderly manner, and profit margins have remained at an excellent level, driving performance higher than expected. Considering the company's recent operating conditions, we raised the company's profit forecast. The company's 2024-2026 EPS is 1.15/1.35/1.54 yuan (the original value is 1.04/1.22 yuan in 2024-2025), referring to comparable companies in the industry. The company was given 15.1X PE in 2025, corresponding to a target price of 20.4 yuan, maintaining a “gain” rating.
The expansion strategy has achieved remarkable results, and the performance has been outstanding. In the first three quarters of 2024, the company achieved revenue of 3.777 billion yuan, +22.22% over the same period. By category, kitchen and bathroom faucets, water purification products, air heating vent products, and health care dental flusher series products all achieved excellent growth, and the category expansion strategy was vigorously implemented. Looking at each channel, European retail channels and Chinese engineering and brand channels have achieved significant growth. In the first three quarters of 2024, the company achieved net profit attributable to shareholders of the parent company of 0.397 billion yuan, +36.66% over the same period last year. On a quarterly basis, profits were evenly distributed in the first three quarters. The year-on-year increase was mainly driven by revenue and a low base contribution due to customer inventory removal in 2023.
Multi-dimensional expansion of brands, categories, and channels. 1) Domestic sales brands: regional concept integration, dealer system restructuring, expansion of chain catering channels such as Starbucks and Domino. 2) Traditional main business: The plastic category expanded to leading hardware. The second phase of the hardware line was put into operation in 2024, and there is plenty of room for procurement improvement.
3) Cross-border e-commerce: The operational capacity was built in 2023, focusing on the superior categories of air and kitchen, and the most popular single product sold on Amazon. 4) Offline channels: US subsidiary launched, local service capacity upgraded, intermediaries, and direct connection with overseas retail channels. The European market expansion is progressing well. Two new stores have already shipped in the third quarter, and three are in the quotation stage.
The global production capacity layout is speeding up. As of the third quarter of 2024, 4 plants have been opened in the second phase of the company's Thailand project, with a total investment and design scale of 1.2 billion yuan. Supply chain support has been completed, and new product projects have been laid out one after another. The investment plan for the new Mexican project is 40 million US dollars, and the production capacity layout is 50 million US dollars. It will be initiated in the form of a leased plant, focusing on plastic kitchen and bathroom products, and is expected to be shipped in 2025.
Risk warning: risk of exchange rate fluctuations; risk of a sharp rise in raw material prices, etc.
